Posted on October 15, 2013 at 10:49 PM
BELLEVUE, Wash. -- Time is running out for lawmakers as the government shutdown drags on and the country inches closer to default.
The stalemate in Congress has some like Jill Eshenbaugh worried this could have a negative impact on her investments.
“A big portion of our retirement is tied up in bonds and the stock market,” said Eshenbaugh.
Financial planner Paul Ried contacted many of his clients to discuss the ongoing situation and the impact of the goverment shutdown and the debt ceiling. In a letter to clients, Ried pointed out the debt ceiling may be the “bigger concern.”
“It’s hard to say which is going to drive market behavior the most. It’s important we know they are both occurring at the same time and that is significant,” said Ried.
Ried analyzed the impact of the previous 17 government shutdowns with statistics from the S&P 500.
Historically, he said the market tends to drop on average by about one percent, but there are times when it actually went up. When there is a drop, Ried said the stats show it usually bounces back within a month.
“The past is the past. It is not a guarantee of the future so there is always that uncertainty. One thing that we can say with certainty is that frankly there will be volatility coming out,” said Ried.
For those worried about their long-term investments, Ried said people should stay the course for now and avoid making any drastic changes.